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What Is an Employer?


Business people standing together in elevator
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An employer is an organization, institution, government entity, agency, company, professional services firm, nonprofit association, small business, store, or individual who employs or puts to work, an employee.

In exchange for the employee’s work or services, the employer pays compensation that may include a salary, an hourly wage, and benefits that is above the Federally mandated minimum wage in the US.

Most employers offer employees a comprehensive employee benefits package, as they can afford to offer benefits, including health insurance and paid time off, holidays, and vacation. Other employers pay just the salary or hourly wage and do not provide employee benefits.

Employers hire employees either as exempt employees who receive a salary for completing a whole job, such as $40,000 a year for supervising the quality department. Or, employers hire employees as nonexempt or hourly workers who are paid an hourly wage, such as $14.00 an hour, for each hour worked, and whose pay is subject to the terms of the Fair Labor Standards Act (FLSA) for overtime.

Work is performed by an employee for the employer under a verbal or an implied or written contractual agreement or contract. Some employers use job offer letters to confirm the details of an employment relationship. In union-represented workplaces, the employer is obligated to pay in accordance with the union-negotiated contract.

An employer has certain responsibilities that are required by law about paying employees, withholding taxes, and filing government reports with the IRS.

An employer generally determines the location and conditions of employment and determines the who, what, when, how, why of the work or services provided by the employee. The employee is subject to the direction and guidance of the employer.

In at-will states, either the employer or the employee may terminate the employment relationship at any time.

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